COVID-19 has brought a spike in global demand for various types of information and communication technology – both in terms of goods and services. As a result, Taiwan has been among the few countries to have maintained a positive economic growth rate despite the pandemic.
However, some of this demand is likely to be a one-off event for 2020, notes Ma Tieying of DBS. The likely one-off purchases this year include desktop computers, laptops, and tablets, as well as consumer electronics products like gaming devices. In the unprecedented situation presented by the pandemic, people across the world spent much more time at home – both at work and at play.
Taiwanese companies that benefiting from this trend include makers of personal computers and various components and peripherals. Economist Tony Phoo of Standard Chartered notes, for example, that heightened sales of home entertainment systems have led to increased orders for lenses and image-projecting technology made by Taiwan companies.
This kind of demand may not continue once the pandemic is under control, says Ma.
“Growth in the segment of computers and consumer electronics may see a pullback in 2021 after a strong surge this year.”
She sees more staying power in the other area of demand for Taiwanese technology that surged during the pandemic: digitalization and automation. “This would continue to grow after COVID-19, creating sustained opportunities for this segment of electronic components,” she says.
Digitalization involves 5G, cloud computing, and data centers, while automation requires robots, drones, artificial intelligence, and the internet of things. Growth in this area “would stimulate demand for servers, network devices, chips, sensors, and various other electronic components,” Ma says.
Global demand for digital connectivity has clearly increased during the pandemic due to the need for video conferencing, e-commerce, and online entertainment, Ma notes. “The application of automation technology has also risen, such as using robots and drones for food and medical supplies, delivery, and disinfection.”
Ma predicts that even after the economy reopens post-COVID-19, many large-scale events may remain virtual for some time. Consumers’ preference for contactless solutions will also continue.
Over the long-term, Ma says, new waves of technological innovations are increasingly being driven by semiconductors, a sector where domestic companies like Taiwan Semiconductor Manufacturing Co. (TSMC) are among the world leaders.
Owing to its strength semiconductors, “Taiwan should be well-placed to benefit from post-pandemic opportunities in the global tech sector,” Ma says. She cites Taiwan’s “well-established semiconductor supply chain ranging from upstream design to downstream fabrication and packaging and testing.”